Thursday, November 11, 2004

What is capitalism?

Promoted from the comments:
But. I don't think a successful future includes capitalism. To me, that would be American liberals making cash off of third-world/"other" workers. And that is what capitalism is. Owners and investors making money off of the workers. Some Liberals complain about capitalism not because conservatives embrace it, but because it sucks for 7/8 of the people in the game.

I understand why people feel this way, but essentially this is liberal spin on an otherwise neutral term (similar to how conservatives manage to transmit an implicit sneer every time they use the word "socialist"). I prefer a different definition for the purposes of this blog: private ownership of property, including the right to make decisions of one's property, such as donating or trading it.

Or: A bunch of liberals get together, pool their resources (money), establish an institution (property), and then decide what to do with it (without having to worry about a bunch of conservative wackos coming along and screwing it up).

There's nothing inherent in the idea of private industry that says it has to behave poorly. Similarly, there's nothing inherent in the idea of government that says it's going to be so benevolent. As liberals, we're virtually trained to envision utopian, well run, well behaved governments, but utopian, well run, well behaved private institutions are just as conceivable. And, in fact, I'd say they're more likely to come into being than a good government is.

In any case, if the word capitalism comes with too much negative baggage, then I'm willing to trade it in for something else (though I can't think of one right now, so if somebody has a suggestion, please post it).


Olman Feelyus said...

"There's nothing inherent in the idea of private industry that says it has to behave poorly."

This depends what you mean by "behave poorly." Unfortunately, inherent in the idea of capitalism is growth and growth by the capitalist's definition means the consumption of resources and the consumption of resources to my mind and many environmentalists means the destruction of the planet. So if you think the destruction of the planet is "behaving poorly" then private industry has to behave poorly. And it does!

In an open competitive market, prices are going to be forced downward. As prices are forced downward, manufacturers have to start looking for ways to produce their product cheaper. Those two ways are in cheaper materials or cheaper labour. Both of those paths lead to poor behaviour.

Some people can afford to buy the more expensive, morally superior product. But most won't. Do you? And even if the morally superior product begins to do well, in order to survive in a capitalist market, it must grow. So it has to open more stores, create more products. All of which is detrimental to the environment. And if it still continues to succeed, eventually it will be so big that it will eventually need to cut costs to survive and that's when it starts going down the path of cheaper labour or cheaper materials and starts to behave poory.

This has never not happened. There is not a company out there that is not hurting the environment or treating its workers fairly all the time. It's the fundamental nature of capitalism.

Mustapha Mond said...

Olman Feelyus:

If the consumption of resources equals bad behavior, then we may as well say goodbye to life. The human race (if not all life on Earth) should get on with the business of wiping itself out. Cynical as I am, I don't see the value in promoting that as a political philosophy.

One thing I'm going to post about soon is the role consumers play in allowing businesses to get away with all the negative things you mention. Essentially, it's the job of business to be as efficient as possible in making a product that people will buy. If people had the information and conviction to not buy products that were made with sweatshop labor or with dolphin blood, then there'd be no sweatshops and no dolphin blood products. Businesses would be forced to find another way to make their products, and I guarantee they would do it, and they'd still find a way to keep making products cheaper and more efficiently.

This is the same as with government regulation. Imagine the strictest, most environmentally and labor friendly regulations possible and force all businesses to abide by them. The same problems arise: how do businesses compete? how do them make products affordable for people with little money?

If there's an inherent flaw in how private businesses operate, it's that they're willing to take advantage of uninformed, undisciplined, and unconscientious, consumers. On the other side of the spectrum we have government, which is willing to take advantage of uninformed and lazy voters. No system is perfect. So, to address the broader topic, I don't see an argument here for why government is a better way to "do business" (so to speak) than the private sector.